Dan Niles is shorting Tesla stock even though he 'loves the company'

Dan Niles – the Founder of Satori Fund says he “loves” Tesla Inc as a company – but is “short” on its stock.

Niles sees Tesla stock as too overvalued

The hedge fund manager is convinced that shares of the electric vehicle behemoth are too expensive now that they have gained more than 140% year-to-date.

More importantly, he sees several headwinds that could hurt Tesla stock in the coming months.

Interest rate on a typical loan for a new-vehicle, for example, has climbed to 9.62%, as per Cox Automotive – which Niles said today on CNBC’s “Squawk Box” creates a difficult environment for auto sales.

Earlier this week, Philippe Houchois – a Jefferies analyst also questioned in a research note if Tesla can maintain its lead in EV tech as he trimmed his price objective on its stock (find out more).

Tesla Model S Plaid is maximum fun!@Tesla @elonmusk pic.twitter.com/lL4mS0Y6xs

— Eva McMillan ♥️ (@EvasTeslaSPlaid) October 11, 2023

Dan Niles owns a Tesla Model X

Tesla Inc remains committed to delivering 1.8 million vehicles globally in 2023.

The EV giant, however, delivered 435,059 vehicles in the third quarter which represented a sequential decline and missed expectations by some 26,500 units – stats that suggested its gross margins will likely remain under pressure in the near term, as per Dan Niles.

His short position in Tesla stock makes up only 1.0% of his portfolio, though. So, it’s a relatively small position.

Note that Niles personally owns a Tesla Model X and sees Elon Musk as the “Thom Edison of our generation”. He’s short on the stock primarily because it’s just too overvalued. Tesla is scheduled to report its quarterly financial results on October 19^th.